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Mitsubishi Expands CD-R Disc Production

Mitsubishi Chemical Corporation announced that it is increasing its production of CD-R discs and entering into a manufacturing and supply agreement with CMC Magnetics.

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Unedited press release follows:

Enhancement of CD-R Business

August 31, 1998 – Mitsubishi Chemical Corporation (Head Office: Chiyodaku, Tokyo, Japan, President: Akira Miura) decided to increase the supply capacity of CD-R (recordable compact disk) from current 6 million pieces per month to 11 million.

CD-R is a recordable compact disk which can write only once and the world annual consumption jumped to 500 to 600 million pieces this year from 180 million last year. The estimate of consumption in 1999 is 800 to 1,000 million and further sharp increase is expected in the next several years. Mitsubishi Chemical is now manufacturing 6 million pieces per month of CD-R both in Mitsubishi Chemical Infonics of Singapore (4.2 million pieces per month) and in Mitsubishi Chemical Infonics Ireland (1.8 million pieces per month). Mitsubishi Chemical investigated how to respond to the marvelous growth of worldwide demand including the addition of new manufacturing lines. As a result, It is decided to consign the toll manufacturing of 5 million pieces per month to CMC Magnetic Corporation of Taiwan (Head Office: Taipei, Taiwan, President: Bob M. S. Wong) for the expansion of supply capacity.

CMC Magnetic Corporation is manufacturing and selling floppy disk (FD), video tape and CD-R and is world No. 1 manufacturer of FD. With the agreement of consignment, CMC Magnetic Corporation construct new manufacturing line (of 5 million pieces per month) exclusively for toll manufacturing for Mitsubishi Chemical and is scheduled to start the manufacturing in October 1998. Mitsubishi Chemical is going to cooperate with CMC Magnetic Corporation by supplying the expertise of manufacturing technologies and experienced personnel, inspecting the products based on the quality standards of Mitsubishi Chemical to secure the same quality with the own product of Mitsubishi Chemical.

(The conventional manufacturing line of CMC Magnetic Corporation will be independently operated of the new exclusive toll manufacturing line by CMC Magnetic Corporation.)

By the toll manufacturing agreement with CMC Magnetic Corporation, Mitsubishi Chemical establishes the third manufacturing base following Singapore and Ireland keeping the position of world top CD-R manufacturer of 11 million pieces per month capacity.

Mitsubishi Chemical has very close relationship with CMC Magnetic Corporation in the wide range business alliances in the toll manufacturing and the transfer of manufacturing facilities as a link of the restructuring of Verbatim, a wholly owned subsidiary of Mitsubishi Chemical America for FD and data tape.

Mitsubishi Chemical determines to operate optical disk business as a core businesses of the company. In the meantime, CD-R will be sold through Mitsubishi Chemical Media in Japan and Verbatim in the rest of the world, both of them are wholly owned subsidiaries of Mitsubishi Chemical Corporation.